Ted Mortonson of Baird explains why conviction in the AI boom doesn't mean buying every dip in tech stocks.

He joins Jack Forehand and Justin Carbonneau to explain what experienced technology investors watch before putting money back to work—and why he still sees AI as the most powerful technology cycle of his career.

The discussion moves from lessons of the dot-com bust to the companies Ted believes can capture AI's profits. They explore the importance of free cash flow, the financing demands of the data center buildout, and how large IPOs could force portfolio managers to sell existing holdings. Ted also shares his views on Apple, Meta, Nvidia, Tesla, and SpaceX, before closing with lessons from his service as a naval aviator.

Topics covered:

- Why Ted Mortonson's institutional clients aren't rushing to buy the semiconductor dip

- What past tech cycles teach about taking profits, preserving capital, and waiting for selling to settle

- Why Ted Mortonson sees a stronger long-term AI opportunity than the dot-com cycle

- How geopolitics, energy costs, regulation, and investor sentiment shape technology investing

- Why free cash flow, engineering resources, and manufacturing scale matter for AI beneficiaries

- Financing the infrastructure buildout before enterprise adoption delivers returns

- How large IPOs and circular financing can create risks for existing shareholders

- Ted Mortonson's concerns about Apple and his outlook for Meta, Tesla, and SpaceX

- Optical networking, advanced chip architectures, and high-bandwidth memory

- Navy lessons on decisions under uncertainty, teamwork, and integrity

Chapters:

00:00 Ted Mortonson on the risks facing tech investors

05:42 Market sentiment and why his clients aren't buying yet

12:00 Dot-com lessons and the danger of buying every dip

16:17 Why Ted sees a different AI cycle

23:06 Which companies could capture AI's profits?

27:38 Regulation and financing the AI buildout

35:10 Can the market absorb massive AI IPOs?

39:30 Circular financing and the Tesla-SpaceX thesis

46:06 Apple, Meta, and competing AI strategies

54:19 SpaceX, advanced chips, and memory technology

58:26 Lessons from serving as a naval aviator

01:03:35 Closing thoughts

Ted Mortonson at Baird:

https://www.rwbaird.com/corporations-and-institutions/institutional-equities-research/team/ted-mortonson/

Learn more about the Excess Returns podcast network:

https://excessreturns.co

No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.

Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip?

Excess Returns

Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip?